TAX
BENEFITS
THE OTHER SIDE
OF THE LEDGER:
STUDENT AID
THROUGH TAX
BENEFITS
documentary film series
Looking Back to Move Forward:
A History of Federal Student Aid
VIEWING GUIDE
LET’S LOOK BACK
TO MOVE
FORWARD
In A History of Federal Student Aid, a documentary
series produced by Lumina Foundation and the
Institute for Higher Education Policy, key policy
makers, their staff, and education researchers
provide insight into the evolution of federal student
aid through their first-hand experiences with the
policymaking process. This short film on the
development of tax benefits for higher education
is one in a series of several that illuminates seminal
moments and offers instructive lessons and building
blocks to guide newer policy innovations.
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FILM
SYNOPSIS
The Other Side of the Ledger: Student Aid Through Tax Benefits
explains the history of tax benefits such as tax credits, tax deductions,
and qualified tuition programs used to pay for higher education related expenses. In an effort to make college more affordable, federal
lawmakers have proposed several approaches to make tax benefits—
primarily aimed at the middle class—a viable way to supplement the
direct student aid programs traditionally targeted at low-income
students. Although these efforts began over half a century ago, it
was not until the late 1990s that tax benefits for college expenses
were written into the tax code. This 14-minute film details important
legislative milestones and describes the growth of these benefits.
HISTORICAL
INFORMATION
1950s–1990s: Development
of Tuition Tax Credits and
State Savings Plans
Scene: 1:41-5:15 minutes
Since the early 1950s, congressional leaders have considered
using tax benefits to help families
pay for college as part of a variety
of legislative efforts supporting
tax relief via deductions, exemptions, and credits.1 These bills
never left legislative committees
4
until 1954 when Congress passed
deductions for student loan interest. 2 In the mid-1960s, in
response to the Civil Rights movement and President Lyndon
Johnson’s Great Society initiatives, congressional Republicans
and Democrats proposed tax
credits for both the K–12 and
postsecondary systems.3, 4 However, the Johnson Administration
opposed these benefits because
they would divert much-needed
FEATURED TAX BENEFITS
FOR HIGHER EDUCATION
TAX CREDITS: A tax credit reduces the amount a filer pays to the
Internal Revenue Service (IRS),
dollar for dollar. Thus a $1,000 tax
credit saves the taxpayer $1,000
in taxes. There are two main
types of credits: nonrefundable
and refundable. A nonrefundable
tax credit can reduce the amount
owed down to $0. A refundable
tax credit can reduce the amount
owed to below $0 and the filer
can receive a refund from the IRS
for the difference.
TAX DEDUCTIONS: A tax deduction reduces a filer’s taxable
income at their marginal tax rate.
For instance, a filer in the 25 percent tax bracket with a $1,000
deduction saves $250 in taxes
(0.25 x $1,000 = $250).
QUALIFIED TUITION PROGRAMS
OR 529 PLANS: Prepaid tuition
plans and college savings plans,
known collectively as Qualified
Tuition Programs or 529 plans,
provide tax advantages and
incentives to make it easier for
families and students to pay for
college. Prepaid tuition plans can
be sponsored by states and educational institutions, and allow
individuals to pay for future credit
hours at the current tuition rate.
College savings plans allow
people to invest in an account
designated for future higher education expenses, including tuition,
fees, books, and room and board.
Earnings from 529 accounts are
not subject to federal taxes.
However, contributions are not
tax-deductible.
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FIGURE 1:
U.S. Unemployment and Inflation Rates in the 1970s
Arguments for tuition tax credits
gained strength and popularity in
the late 1970s. During President
Jimmy Carter’s term, several tax
credit bills were sponsored by
both liberal and conservative
members of Congress to help
middle-class families facing
wage loss due to inflation and
rising unemployment rates and
were interested in or enrolling in
college (see figure 1).8, 9 In opposition, the Carter Administration,
along with key members of
Congress, proposed the Middle
Income Students Assistance
Act—legislation that would
make middle-income students
eligible for Pell Grants and
all families ( regardless of
income) eligible for federal
loans.10 Although tuition tax
credits did not come to fruition
6
With tuition prices rising (see
figure 2), states wanted to provide additional support. Michigan
developed the nation’s first
prepaid tuition program—the
Michigan Education Trust (MET)
Plan—in 1986.12 Such prepaid
tuition programs enabled people
to prepay for future tuition
expenses at any public college
or university in their state at
current tuition rates.13 This
allowed families to begin saving
for college early and avoid
paying increasingly expensive
college tuition in the future.
Although investment gains
from the MET Plan were initially
federally taxed, the courts
declared the plan federally
tax-exempt in 1994.14, 15 This decision set a foundation for
legislation that was created two
years later. In 1996, Congress
14%
Inflation Rate
12%
10%
Rate
at the time, other tax benefits
were established through the
1978 Revenue Act, such as
an employer-provided tuition
benefit— deductible to the
employer and not included in the
employee’s gross income for tax
purposes—as well as tax benefits
for tuition remission for campus
employees and tax benefits for
scholarship and grant amounts.11
8%
6%
Unemployment Rate
4%
2%
0%
70
71
72
73
74
75
76
77
78
79
80
Year
Sources: U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey,
Table 1. Employment status of the civilian non-institutional population, 1945 to date http://www.
bls.gov/cps/cpsaat01.htm; U.S. Bureau of Labor Statistics, CPI Detailed Report. Table 24. Historical
Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, all items http://www.
bls.gov/cpi/cpid1505.pdf
FIGURE 2:
Average Tuition, Fees, and Room and Board (2015 Dollars)
$50,000
$45,000
$40,000
2015 Dollars
funds from poor to affluent families given that low-income
families typically do not qualify
for tax credits due to their little
to no tax liability.5, 6 The administration also believed tax credits
would not increase enrollment of
needy students, which was the
main thrust of the Higher Education Act (HEA) of 1965, and would
jeopardize future appropriations
for its signature aid programs.7
$35,000
Public
Private Nonprofit
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
1975-76
1980-81
1985-86
1990-91
1995-96
2000-01
2005-06
2010-11
2015-16
Academic Year
Source: The College Board, Trends in College Pricing 2015, Table 2A. Average Tuition and Fees and
Room and Board in 2015 Dollars, 1975-76 to 2015-16, Selected Years http://trends.collegeboard.
org/sites/default/files/trends-college-pricing-web-final-508-2.pdf
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passed the Small Business Job
Protection Act, establishing that
the earnings from prepaid tuition
programs would be exempt from
taxation.16 This legislation also
allowed the earnings from college
savings plans—accounts created
to pay for future higher education
expenses17—to be tax-exempt.
Officially called Qualified Tuition
Plans, prepaid tuition programs
and college savings plans are
more commonly referred to as
529 plans.
1997: Taxpayer Relief Act –
Hope Scholarship and
Lifetime Learning Tax Credit
Scene: 5:15-7:51 minutes
Tuition tax credits did not
reemerge again as a major policy
issue until the presidential election of 1996. During his reelection
campaign, President Bill Clinton
made a promise to middle-class
voters to make the first two years
of college as common as K–12
education.18, 19 At the same time,
Republicans created a series
of policy proposals, known as
the “Contract with America,” to
balance the federal budget and
cut taxes. 20 With this as the
cornerstone of the new congres-
8
In 1996, there was a
debate about balancing the
federal budget between a
Democratic President and a
Republican Congress. And
the Republican Congress
was adamant that tax cuts
be part of any balanced
budget agreement.
Pauline Abernathy
sional Republican majority, the
Clinton Administration proposed
a higher education tax credit.
Through various negotiations,
two income tax credits for higher
education expenses—the Hope
Scholarship (Hope) and the Lifetime Learning Tax Credits—were
authorized by the Taxpayer Relief
Act of 1997. 21, 22 Additional tax
cuts, such as capital gains and
estate taxes for higher-income
families, were also authorized as
a compromise.23
2001: Economic Growth &
Tax Relief Reconciliation Act
(EGTRRA) – Changes to 529
Plans and Tuition and Fees
Deduction
Scene: 7:51-9:52 minutes
In 2001, modifications to 529
plans and the creation of a new
tax benefit for college expenses
were enacted. The Economic
Growth and Tax Relief Reconciliation Act (EGTRRA) legislated
that the distributions from 529
plans would no longer be subject
to federal taxes.24 Prior to 2001,
the money in 529 plans grew tax
deferred, but distributions from
the accounts to beneficiaries
were subject to tax—similar to
income.25 In brief, EGTRRA made
529 plans more generous.
Additionally, the act introduced a
third higher education tax incentive—a deduction (rather than a
credit) for tuition and higher
education expenses—made
available to individuals not using
the existing higher education
tax credits. Rather than a
dollar-for-dollar reduction received
through tax credits, these deductions reduced the amount of
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FIGURE 3:
College Enrollment and Median Household Income from 2000 to 2014
$59,000
College Enrollment
(Thousands)
$58,000
College Enrollment
10,000
$57,000
$56,000
$55,000
$54,000
$53,000
5,000
Median Household Income
$52,000
$51,000
$50,000
$49,000
0
2000 01
02
03
04
05
06
07
08
09
10
11
12
13
Median Household Income
(2014 Dollars)
15,000
14
Year
Note: Bureau of Labor Statistics CPI Inflation Calculator used to convert real dollars to 2014 dollars
http://www.bls.gov/data/inflation_calculator.htm
income subject to taxation up
to $4,000, dependent on the
taxpayer’s income bracket. The
deduction was originally made
available to tax filers through
December 31, 2005, but has been
subsequently extended through
the end of 2016.26
2009: American Recovery and
Reinvestment Act (ARRA) –
American Opportunity Tax
Credit (AOTC)
Scene: 9:52-12:07 minutes
During the Great Recession, college enrollment increased even
as families saw their income
decline (see figure 3). In 2009,
as part of the American Recovery
and Reinvestment Act (ARRA),
10
the Obama Administration signed
into law the American Opportunity Tax Credit (AOTC ) — a
temporary tax credit that was
more favorable to students than
the Hope Tax Credit. The AOTC
increased the credit amount from
$1,800 to $2,500 and allowed
taxpayers to claim the credit for
four years of postsecondary
enrollment instead of two. It also
raised the income limits to allow
more upper-income families
suffering from the effects of the
recession to qualify. 27 To help
low-income families with no tax
liability, the AOTC made up to 40
percent of the credit refundable—
meaning that if a taxpayer is
eligible for a credit and the taxes
owed by that individual are less
Sources: National Center for Education Statistics, Digest of Education Statistics, Table 303.10. Total
fall enrollment in degree-granting postsecondary institutions, by attendance status, sex of student,
and control of institution: Selected years, 1947 through 2023 http://nces.ed.gov/programs/digest/
d13/tables/dt13_303.10.asp; U.S. Census Bureau, Current Population Survey (CPS) Reports
2000-2014 https://www.census.gov/hhes/www/income/publications/cps-reports.html
than the credit, the excess can
be refunded by the government.28
Although the AOTC was originally set to expire in 2010, the credit
has been extended through
legislation several times.29 , 30 The
Protecting Americans from Tax
Hikes (PATH) Act, signed into law
by President Barack Obama at
the end of 2015, made the AOTC
a permanent part of the tax code,
thereby indefinitely replacing the
Hope Tax Credit.31
Due to the increased generosity
of the AOTC and to awareness
building, more tax filers now
claim higher education credits,
which increases the cost to
the government. In 2008, prior
to AOTC, roughly 7.7 million
taxpayers claimed any higher
education credit and the cost to
the government was $8 billion.
In 2014, the tax expenditure was
approximately $23 billion.32, 33
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TAX BENEFITS FOR HIGHER EDUCATION
KEY FACTS
Qualified Tuition Plans34
Hope Scholarship
Tax Credit35
Lifetime Learning
Tax Credit36
Tuition and Fees
Deduction37
American Opportunity
Tax Credit38
Common Name
529 plans
Hope Credit
Lifetime Learning Credit
Deductions
AOTC
Created
1996
1997
1997
2001
2009
Overview
There are two types of 529
plans: Prepaid tuition plans
allow people to purchase
tuition credits for a beneficiary at a designated institution
for future use. College
savings plans allow people to
invest in an account for a
beneficiary’s future higher
education expenses. Money
grows and is distributed
without federal taxation.
Nonrefundable tax credit
of up to $1,800 per
student for eligible tuition
and fees in the first two
years of postsecondary
education toward a
degree or certificate.
Nonrefundable tax credit
of up to $2,000 per tax
return for eligible tuition
and fees (i.e., 20 percent
of $10,000 in expenses)
for an unlimited number
of years to pursue
degree, certificate, and/
or courses to acquire or
improve job skills.
Tax deductions reduce a
filer’s tax liability at their
marginal tax rate. For a
filer in the 25 percent
tax bracket, a $1,000
deduction saves him or
her $250 in taxes (0.25
x $1,000 = $250).
Partially refundable tax
credit of up to $2,500
per student for eligible
tuition and fees and
course-related books,
supplies, and equipment
in the first four years of
postsecondary study.
Income PhaseOut Range
(2016) 39, 40
Any U.S. resident or citizen,
regardless of income, can
open an account.
$50K– $60K single filers;
$100K– $120K joint filers 41
$55K– $65K single filers;
$110K– $130K joint filers
$65K– $80K single
filers; $130K– $160K
joint filers
$80K– $90K single filers;
$160K– $180K joint filers
Status
Tax-free distributions became
part of 529 plans in 2006.42
Replaced by the AOTC
with the passage of the
PATH Act of 2015.43
Permanent part of the tax
code with income limits
adjusted for inflation.
Extended through 2016
with the passage of the
PATH Act of 2015.44
Permanent part of the
tax code.45
NOTE: Unless otherwise noted, information was collected from the legislation
that authorized each program.
12
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TIMELINE
1978
Revenue Act
»» Established an employer-provided tuition benefit, which
would be excluded from the employee’s gross income for
tax purposes.46
1986
Michigan Education Prepaid Tuition Plan
»» Michigan developed the nation’s first prepaid tuition program,
which allowed families to prepay tuition at any Michigan public
postsecondary institution at current tuition rates for any child
living in Michigan.47
1996
Small Business Job Protection Act
»» Established that earnings and disbursements from qualified
state tuition programs and college savings plans, later referred
to as 529 plans, be exempt from federal taxation starting in
the 1996 tax year. Expenses that qualified under the plan included tuition, fees, books, supplies, and equipment required
for the attendance of an eligible educational institution.48
1997
14
Taxpayer Relief Act
»» Created the Hope Scholarship Tax Credit and Lifetime
Learning Tax Credit.49 The Hope Scholarship Credit provided
a dollar-per-dollar reduction of tax liability for the first two
years of postsecondary education up to $1,500. The Lifetime
Learning Tax Credit provided a dollar-per-dollar reduction of
tax liability for unlimited years of postsecondary education up
to $2,000.50
»» Amended the definition of higher education expenses to
include room and board for students attending at least
half-time.51
»» Provided special treatment of 529 accounts by gift and estate
tax regulations—both important changes for 529 plan donors
and beneficiaries—and defined eligible educational institutions
as Title IV institutions.52
2001
Economic Growth and Tax Relief Reconciliation Act
(EGTRRA)
»» Enabled taxpayers to claim a Hope Scholarship Tax Credit and
Lifetime Learning Tax Credit in the same year that they claim
an exclusion from contributions made to an education savings
account (e.g., Coverdell and 529 plans), as long as the same
expenses are not used for both benefits.53
»» Made distributions from 529 plans for education-related expenses tax-exempt. This tax-exempt status was set to expire
at the end of 2010.54
»» Enabled taxpayers to claim a deduction for qualified tuition
and related expenses, which reduced the amount of income
subject to tax by up to $4,000 if the tax filer’s adjusted gross
income for the taxable year did not exceed a certain amount.55
The deduction was set to expire at the end of 2014.56
»» Expanded eligibility for tax deductions for the interest paid on
student loans by increasing the maximum deduction amount
to $2,500 and removing the 60-month limit on loan interest
deductions.57
2005
Gulf Opportunity Zone Act
»» Temporarily increased the amount of the Hope Scholarship
and Lifetime Learning credits for students in the Gulf Opportunity Zone, a federally defined region affected by hurricanes
Wilma, Rita, and Katrina, for tax years 2005 and 2006.58
2006
Pension Protection Act
»» Permanently extended the rule enacted under EGTRRA
allowing taxpayers to claim a Hope Scholarship Tax Credit and
Lifetime Learning Tax Credit in the same year that they claim
an exclusion from contributions made to an education savings
account, as long as the same expenses are not used for both
benefits.59
»» Made the tax-exempt status of distributions for
education-related expenses from 529 plans permanent.60
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2007
College Cost Reduction and Access Act
»» Clarified that the value of 529 accounts should be considered
parental assets, rather than student assets, when calculating
the amount of money dependent students should be
expected to pay for college through the Free Application
for Federal Student Aid.61
2008
Heartland Disaster Relief Act
»» Extended increases to the Hope Scholarship and Lifetime
Learning Tax Credits enacted for Gulf Opportunity Zone residents to those living in Midwestern states affected by storms,
flooding, and tornadoes for tax years 2008 and 2009.62
2009
American Recovery and Reinvestment Act
»» Created the American Opportunity Tax Credit (AOTC) to
temporarily replace the Hope Scholarship Tax Credit for the
2009 and 2010 tax seasons. The AOTC increased the Hope
Scholarship Tax Credit limit, expanded the number of years
a taxpayer could claim the credit, and made more high- and
low-income individuals eligible.63
»» Included course materials as a college expense.64
2010
Tax Relief, Unemployment Insurance Reauthorization, and
Job Creation Act
»» Extended AOTC for two more tax years: 2011 and 2012.65
2012
American Taxpayer Relief Act
»» Extended AOTC for another five years, through December
2017.66
2015
Protecting Americans from Tax Hikes Act
»» Permanently extended AOTC.67
»» Extended tax deductions for tuition and education expenses
through December 2016.68
»» Amended 529 plans to allow for the purchase of computer
equipment and technology, beginning with tax years after
December 2014.69
FEATURED EXPERTS70
Pauline Abernathy
Douglas Holtz-Eakin
Policy Advisor, White House and
U.S. Department of Education,
1995-1999
Chief Economist, President’s
Council of Economic Advisers,
2001–2002; Director,
Congressional Budget Office,
2003–2005
Jason Delisle
Legislative Assistant, Office of
Congressman Thomas E. Petri
(R-WI), 2000–2006; Professional
Staff, U.S. Senate Budget
Committee, 2006–2007
Brian Fitzgerald
Staff Director, Advisory
Committee on Student Financial
Assistance, 1988–2005
Gaby Gomez
Professional Staff, U.S. House
Education and Labor Committee,
2006–2009; Assistant Secretary
for Legislation and Congressional
Affairs, U.S. Department of
Education, 2009–2014
Frank Holleman
Chief of Staff, Secretary Richard
W. Riley, U.S. Department of
Education, 1994–1997; Deputy
Secretary of Education, U.S.
Department of Education,
1999–2000
18
Karin Johns
Professional Staff, Office of
Congressman Fred Grandy
(R-IA), 1990–1994; Legislative
Director, Office of Representative
Phil English (R-PA), 1995–1998
Maureen McLaughlin
Acting Assistant Secretary and
Deputy Assistant Secretary,
Office of Postsecondary
Education, U.S. Department of
Education, 1993–2002
Russell Sullivan
Tax Counsel and Legislative
Director, Office of Senator Bob
Graham (D-FL), 1995–1999;
Chief Tax Counsel and Staff
Director, U.S. Senate Finance
Committee, 1999–2013
Thomas Wolanin
Professional Staff, U.S. House
Education and Labor Committee,
1975–1981, 1985–1987, 1991–
1993; Senior Staff, U.S.
Department of Education,
1993–1996
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FOOTNOTES
1 One of the more popular tuition tax credit
proposals during this era came from outside
Congress. That proposal, developed by
the American Council on Education (ACE)
in 1954, included a $450 credit to ease
the burden of rising tuition and fees. John
Meck, vice president at Dartmouth College
and ACE’s chairman on taxation, formally
presented this plan to the House Ways
and Means Committee in 1958, but it was
not approved due to projected losses in
revenue to the U.S. Treasury and concerns
about whether such tax relief would benefit
middle-income families. In fact, none of
these proposals ever left the legislative
committees where they were introduced.
See Freeman, R. A. (1965). Crisis in college
finance? Time for new solutions. Washington, DC: The Institute for Social Science
Research.
2 Crandall-Hollick, M. L. (2013). Higher
education tax benefits: Brief overview and
budgetary effects (Report No. R41967).
Washington, DC: Congressional Research
Service. Retrieved from https://fas.org/sgp/
crs/misc/R41967.pdf
3 During the debate leading up to the HEA of
1965, proponents of the credits—conservative representatives from both parties led
by Senator Abraham Ribicoff (D-CT)—proposed a credit of up to $325 toward tuition
and fees, which is about $2,500 in today’s
dollars.
4 Silliman, B. R. (2011). College tuition tax
credits: An examination of the impact of the
American Opportunity, Hope, and Lifetime
Learning tax credits since 1998. Proceedings of American Society of Business
and Behavioral Sciences, 18(1), 279–288.
Retrieved from http://asbbs.org/files/2011/
ASBBS2011v1/PDF/S/SillimanB.pdf
5 The Democratic-controlled Congress, which
had already approved a tax break in 1964,
generally agreed with Johnson’s plans to
expand higher education through the HEA,
and several proposals for college tuition tax
credits never materialized from the House
Ways and Means Committee or the Senate
led by Abraham Ribicoff (D-CT).
20
6 Bernstein, I. (1996). Guns or butter: The
presidency of Lyndon Johnson. New York,
NY: Oxford University Press.
7 Silliman, B. R. (2002). Federal tax policy in
the making: 32 years to enact college tuition
tax credits. Review of Business, Winter
2002, 38–43. Retrieved from http://connection.ebscohost.com/c/articles/6425888/
federal-tax-policy-making-32-years-enact-college-tuition-tax-credits
8 Tuition tax credits were supported by
leading conservative and liberal members
of Congress. As a result, two bills, one
from the Senate Finance Committee (H.R.
3946) and one from the House Ways and
Means Committee (H.R. 12050) emerged
in 1978. The Senate bill had more generous
provisions, including a higher limit ($500),
a refund for those with no tax liability, and,
controversially, credits for K–12 tuition.
Because the House and the Senate could
not agree to exclude tax credits for private
K–12 schools in the final bill—and President
Carter threatened to veto any bill including
such legislation—the proposal was dropped.
See CQ Almanac. Tuition tax credit fails
under veto threat. (1978). Retrieved from
http://library.cqpress.com/cqalmanac/document.php?id=cqal78-1238326
9 Carter, J. (1978, May 5). Spokane, Washington Remarks and a Question-and-Answer
Session at a Town Meeting. The American
Presidency Project. Retrieved from http://
www.presidency.ucsb.edu/ws/index.
php?pid=30757
10 Silliman, B. R. (2002). Federal tax policy in
the making: 32 years to enact college tuition
tax credits. Review of Business, Winter
2002, 38–43. Retrieved from http://connection.ebscohost.com/c/articles/6425888/
federal-tax-policy-making-32-years-enact-college-tuition-tax-credits
11 Revenue Act of 1978. (P.L. 95-600). United
States statutes at large, 92 Stat. 2763. Sec.
127. Retrieved from http://www.legisworks.
org/GPO/STATUTE-92-Pg2763.pdf
12 State of Michigan. (2015). Michigan Education Trust. Retrieved from
http://www.michigan.gov/setwithmet/0,4666,7-237-44460-154276--,00.html
13 The National Center for Public Policy and
Higher Education. A national status report
on the affordability of American higher
education. (Table: Summary of state-sponsored prepaid tuition plans). San Jose,
CA: Author. Retrieved from http://www.
highereducation.org/reports/losing_ground/
knapp_prepaid.pdf
14Ibid.
15 Post, K.C. (2013). Higher education tax incentives: Why current reform is necessary.
The Southern Law Journal, XXIII(73). Retrieved from http://www.southernlawjournal.
com/2013_1/SLJ_Spring%202013_Post.pdf
16 Small Business Job Protection Act of 1996.
(P.L. 104-188). United States statutes at
large, 110 Stat. 1895. Sec. 529. Retrieved
from http://www.gpo.gov/fdsys/pkg/STATUTE-110/pdf/STATUTE-110-Pg1755.pdf
17 Qualified higher education expenses include
tuition, fees, and books. In 1997, through the
Taxpayer Relief Act, room and board was
added on as a qualified expense.
18 Silliman, B. R. (2002). Federal tax policy in
the making: 32 years to enact college tuition
tax credits. Review of Business, Winter
2002, 38-43. Retrieved from http://connection.ebscohost.com/c/articles/6425888/
federal-tax-policy-making-32-years-enact-college-tuition-tax-credits
19 Smith, S. B. (2007). For love of politics:
Inside the Clinton White House. New York:
NY: Random House.
20 Gingrich, N. (1994, September 22). The Capitol Steps Contract and Cynicism in Washington, DC. Retrieved from http://www.rialto.
k12.ca.us/rhs/planetwhited/AP%20PDF%20
Docs/Unit%2014/CONTRAC7.PDF
21 Campbell, A. L. (2011). Paying America’s
way: The fraught politics of taxes, investments, and budgetary responsibility. In T.
Skocpol & L. R. Jacobs (Eds.), Reaching
for a new deal: Ambitious governance,
economic meltdown, and polarized politics
in Obama’s first two years. New York, NY:
Russell Sage Foundation.
22 Taxpayer Relief Act of 1997. (P.L. 105-34).
United States statutes at large, 111 Stat.
799. Sec. 201(25A). Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-105publ34/
pdf/PLAW-105publ34.pdf
23 Gray, J. (1997, August 1). Congress approves
comprehensive tax-cutting bill. The New
York Times. Retrieved from http://partners.
nytimes.com/library/politics/080197congress-budget.html
24 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United States
statutes at large. 115 Stat. 63. Sec. 402 (b)
(1)(B)(i)(ii) Retrieved from http://www.gpo.
gov/fdsys/pkg/STATUTE-115/pdf/STATUTE115-Pg38.pdf
25 The Department of the Treasury. (2009). An
analysis of Section 529 college savings and
prepaid tuition plans. Retrieved from http://
www.treasury.gov/resource-center/economic-policy/Documents/09092009TreasuryReportSection529.pdf
26 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 153, 825. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
27 American Recovery and Reinvestment Act
of 2009. (P.L. 111-5). United States statutes
at large, 123 Stat. 313. Sec. 1004. Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW111publ5/pdf/PLAW-111publ5.pdf
28Ibid.
29 Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of
2010. (P.L. 111-312). United States statutes
at large, 124 Stat. 3299. Sec. 103. Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW111publ312/pdf/PLAW-111publ312.pdf
30 American Tax Relief Act of 2012. (P.L. 112240). United States statutes at large.126
Stat. 2319. Sec. 103. Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-112publ240/
pdf/PLAW-112publ240.pdf
31 Protecting Americans from Tax Hikes Act of
2015. (P.L. 114-113). Sec. 102, 803. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
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32 Tax expenditures are projected losses in
revenue for the U.S. Treasury. They are used
to promote social goals without incurring
direct expenditures to the federal budget.
However, a loss in revenue to the Treasury
can increase the federal deficit.
33 Bulman, G. B., & Hoxby, C. M. (2014).
The returns to the federal tax credits for
higher education (NBER Working Paper
20833). Cambridge, MA: National Bureau of
Economic Research. Retrieved from http://
www.irs.gov/pub/irs-soi/14rpfedtaxcredithighered.pdf
34 Small Business Job Protection Act of 1996.
(P.L. 104-188). United States statutes at
large, 110 Stat. 1895. Sec. 529. Retrieved
from http://www.gpo.gov/fdsys/pkg/STATUTE-110/pdf/STATUTE-110-Pg1755.pdf
35 Taxpayer Relief Act of 1997. (P.L. 105-34).
United States statutes at large, 111 Stat.
799. Sec. 201(25A). Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-105publ34/
pdf/PLAW-105publ34.pdf
36Ibid.
37 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United
States statutes at large. 115 Stat. 66. Sec.
431(a). Retrieved from http://www.gpo.
gov/fdsys/pkg/STATUTE-115/pdf/STATUTE115-Pg38.pdf
38 American Recovery and Reinvestment Act
of 2009. (P.L. 111-5). United States statutes
at large, 123 Stat. 313. Sec. 1004. Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW111publ5/pdf/PLAW-111publ5.pdf
39 Income phase-out range is the income
range where the credit begins to decrease,
gradually reducing to zero (i.e., no credit
granted) at the upper income limit, and is
adjusted for cost of living each year. For all
the programs outlined here, we use the
2016 income phase-out range, except for
the Hope Tax Credit, which uses data from
the last year it was applicable (i.e., 2010).
40 U.S. Department of the Treasury. Internal
Revenue Service. (2016). 970: Tax
benefits for education. (Cat. No. 25221V).
Retrieved from https://www.irs.gov/pub/
irs-pdf/p970.pdf
22
41 U.S. Department of the Treasury. Internal
Revenue Service. (2010). 970: Tax benefits
for education. (Cat. No. 25221V). Retrieved
from https://www.irs.gov/pub/irs-prior/p970-2009.pdf
52.Taxpayer Relief Act of 1997 (P.L. 105-34).
United States statutes at large, 111 Stat.
810. Sec. 211(5)(B). Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-105publ34/
pdf/PLAW-105publ34.pdf
61 College Cost Reduction and Access Act.
(P.L. 110-84). United States statutes at
large. 121 Stat. 806 Sec. 604 Retrieved
from https://www.congress.gov/110/plaws/
publ84/PLAW-110publ84.pdf
42 Pension Protection Act of 2006. (P.L.
109-280). Stat. 780. United States statutes
at large. 120 Stat. 780. Sec. 1304 (b).
Retrieved from http://www.gpo.gov/
fdsys/pkg/PLAW-109publ280/html/PLAW109publ280.htm
53 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United States
statutes at large. 115 Stat. 59(g) & Stat.
61(v). Sec 401-402. Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-107publ16/
pdf/PLAW-107publ16.pdf
62 Heartland Disaster Tax Relief Act of 2008.
(P.L. 110-343), United States statutes
at large, 122 Stat. 3912. Sec. 702(a)(1)
(B). Retrieved from http://www.gpo.gov/
fdsys/pkg/PLAW-110publ343/pdf/PLAW110publ343.pdf
43 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 102, 803. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
54 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United States
statutes at large. 115 Stat. 59(g) & Stat.
61(v). Sec 401-402. Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-107publ16/
pdf/PLAW-107publ16.pdf
63 American Recovery and Reinvestment Act
of 2009. (P.L. 111-5). United States statutes
at large, 123 Stat. 313. Sec. 1004. Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW111publ5/pdf/PLAW-111publ5.pdf
44 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 153, 825. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
45 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 102, 803. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
46 Revenue Act of 1978. (P.L. 95-600). United
States statutes at large, 92 Stat. 2763. Sec.
127. Retrieved from http://www.legisworks.
org/GPO/STATUTE-92-Pg2763.pdf
47 State of Michigan, Michigan Education Trust (2015). Retrieved from
http://www.michigan.gov/setwithmet/0,4666,7-237-44460-154276--,00.html
48 Small Business Job Protection Act of 1996.
(P.L. 104-188). United States statutes at
large, 110 Stat. 1898. Sec. 529(3). Retrieved
from http://www.gpo.gov/fdsys/pkg/STATUTE-110/pdf/STATUTE-110-Pg1755.pdf
49 Taxpayer Relief Act of 1997. (P.L. 105-34).
United States statutes at large, 111 Stat.
799. Sec. 201(25A). Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-105publ34/
pdf/PLAW-105publ34.pdf
50 Taxpayer Relief Act of 1997 (P.L. 105-34).
United States statutes at large, 111 Stat.
810. Sec. 211(a). Retrieved from http://www.
gpo.gov/fdsys/pkg/PLAW-105publ34/pdf/
PLAW-105publ34.pdf
51Ibid.
55 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United
States statutes at large. 115 Stat. 66. Sec.
431(a). Retrieved from http://www.gpo.
gov/fdsys/pkg/STATUTE-115/pdf/STATUTE115-Pg38.pdf
56 Tax Increase Prevention Act of 2014. (P.L.
113-295). United States statutes at large,
128 Stat. 4013. Sec. 107(a). Retrieved from
https://www.congress.gov/113/plaws/
publ295/PLAW-113publ295.pdf
57 Economic Growth and Tax Relief Reconciliation Act of 2001. (P.L. 107-16). United
States statutes at large. 115 Stat. 63. Sec.
412(a). Retrieved from http://www.gpo.
gov/fdsys/pkg/STATUTE-115/pdf/STATUTE115-Pg38.pdf
58 Gulf Opportunity Zone Act of 2005.
(P.L. 109-135). United States statutes at
large, 119 Stat. 2594. Sec. 102(a)(1)(2)
(3). Retrieved from http://www.gpo.gov/
fdsys/pkg/PLAW-109publ135/pdf/PLAW109publ135.pdf
59 Pension Protection Act of 2006. (P.L.
109–280). United States statutes at large.
120 Stat. 1109. Sec. 1304(a). Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW109publ280/pdf/PLAW-109publ280.pdf
64Ibid.
65 Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of
2010. (P.L. 111-312). United States statutes
at large, 124 Stat. 3299. Sec. 103. Retrieved
from http://www.gpo.gov/fdsys/pkg/PLAW111publ312/pdf/PLAW-111publ312.pdf
66 American Tax Relief Act of 2012. (P.L. 112240). United States statutes at large.126
Stat. 2319. Sec. 103. Retrieved from http://
www.gpo.gov/fdsys/pkg/PLAW-112publ240/
pdf/PLAW-112publ240.pdf
67 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 102, 803. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
68 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 153, 825. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
69 Protecting Americans from Tax Hikes Act,
2015. (P.L. 114-113). Sec. 302, 845. Retrieved
from https://www.congress.gov/114/bills/
hr2029/BILLS-114hr2029enr.pdf
70 Affiliations of documentary cast members
correspond to the policy period discussed in
the film.
60 Pension Protection Act of 2006. (P.L.
109-280). Stat. 780. United States statutes
at large. 120 Stat. 1109 Sec. 1304 (b).
Retrieved from http://www.gpo.gov/
fdsys/pkg/PLAW-109publ280/html/PLAW109publ280.htm
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